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Vietnam Experience Inspires Vet to Create Delivery Company

March 4, 2014 10:03 AM

Fred Smith, CEO of FedEx, speaks about his wartime experiences and about FedEx at the Pentagon, Feb. 28, 2014. The event, called “Battlefield to Boardroom,” commemorates the 50th anniversary of the Vietnam War.

During his wartime service, Smith said, he was impressed with the effectiveness of wartime logistics and Marine Corps leadership values. He thought he might be able to use some of that experience to build a successful business in the civilian sector.

Smith spoke about his wartime experiences during a Feb. 28 event at the Pentagon called "Battlefield to Boardroom." The presentation was part of the ongoing, nationwide "Commemoration of the 50th Anniversary of the Vietnam War." Lt. Gen. Raymond Mason, the Army’s deputy chief of staff for logistics, hosted the event and represents the Army as one of the many partners involved in officially recognizing and commemorating the war.

Smith told the Pentagon Auditorium audience that after his Vietnam experience, he went on to found the shipping company Federal Express. Today, he serves as chairman, president and CEO of that Fortune 100 company.

"Everything that went into FedEx that made the business that it is today relates to what I learned in the Marine Corps, and I've always been grateful for that education and for those I've served with," he said.

In 1966, Smith became a platoon leader with the 1st Marine Division in Chu Lai, South Vietnam. He said there was a shortage of officers, so pretty quickly he became commander of Kilo Company, 3rd Battalion, 5th Marines. His rifle company participated in the epic battle for Hue City.

He said that commanding those men was the proudest moment of his life.

Of his Marines, he remarked, "They were the finest group of young men you could ever have -- courageous beyond belief -- and the memory of that is with me every day of my life."

During his second tour in Vietnam, Smith was a forward air controller with Marine Observation Squadron 2 at Marble Mountain.

Those wartime experiences, he said, gave him a deep appreciation for not only the leadership qualities of Marines, but also their organizational structure.

"Our close-air support with Marine Corps A-4s and F-4s was spectacular, unbelievable, bringing precision and coordination to the battle," he said.

When Smith started Federal Express in 1971, one of the first innovations he said he brought was integrating air-ground operations and ensuring everything was well coordinated, from the pickup and delivery folks to the pilots. "Lessons learned during Vietnam played over and over in my mind when we developed the business plan," he said.

Part of that plan development was getting a fitting motto and a mission statement, he said, recalling the famous Marine motto, Semper Fidelis, or "always faithful."

While it’s not in Latin, the FedEx motto is short enough to remember, he said, and fits the mission: "I will make every FedEx experience outstanding."

The Marine colors are scarlet and gold, Smith noted, and the primary FedEx color is purple. Thus, the FedEx motto is known as the "Purple Promise."

Another lesson Smith said he learned from the Marines was ensuring that each operating company of FedEx is managed collaboratively and is capable of operating independently. He said that was his takeaway lesson from observing the military services working together and small-unit leaders being capable of operating independently when the situation called for it.

The process at FedEx for selecting leaders is "rigorous," he said, adding that the company usually promotes from within. "The vast majority of FedEx leaders today started out as pickup or delivery people, or washing airplanes," he added.

Not everyone is leader material, he noted, and they don't necessarily have to be. If they have good technical skills, he said, there's a career path for them at FedEx. With a workforce of some 350,000 people worldwide, not everyone can be a leader, he said.

As in every organization, people at FedEx sometimes get into trouble. The company’s process for handling disciplinary problems dates back to lessons Smith learned from the Marines. Employees can request "mast" up the chain of command, all the way to the unit CEO, he said.

There's also a review board and, he said, and sometimes the board will hand over proceedings to a peer review board made up of those who work with the individual. The peer review board has the power to overturn management's decision.

Smith summed up his business philosophy: "If you take care of the folks, treat them right, put good leaders in front of them, communicate with them, set the example, make sure they understand what's in this for them, make sure they understand the importance of what they're doing, they'll provide that service. Keeping that Purple Promise, and profit will take care of itself."

FedEx recently was named No. 8 on Fortune magazine’s list of the most admired companies, Smith said. "The reason that happened had nothing to do with me,” he added. “It had to do with those 350,000 folks."

Sometimes when Smith is asked to give lectures at business schools, he's asked about the success of his company and why people like to work there. He said they're surprised when he tells them that his greatest learning experiences came from being with the Marines.

Of Marines and service members from all of the services today, he said, "I'm in awe of the quality of the troops and young officers I've had opportunity to come in contact with."

But Smith's experiences with his Marines during the Vietnam War have left an indelible mark on him, including those who were not as fortunate to return.

"There's not a day that goes by that I don't think about the names of those on the Vietnam Wall," he said, noting that he served with some of them.